ULICORP (Trading Buy, TP @ RM4.46). ULICORP was among some of the second-liners that underwent heavy sell-down as of recent, declining 46.7% from its 24th June high level of RM6.75 to a recent low level of RM3.60. We observed that the stock had formed a strong psychological support level at RM3.60 (S1) where buying support had normally emerged whenever the stock reaches this level. This was showcased when ULICORP rebounded from the S1 level to close higher by 7.0 sen (1.88%) to close at RM3.80 yesterday. Key momentum indicators are also in deep oversold position, suggesting this could be a good level to enter the stock. Hence, we recommend a Trading Buy call on the stock with a short-term TP of RM4.46 (3 bids below RM4.50), while employing a strict stop-loss at RM3.56 (3 bids below RM3.60). Resistance levels are seen at RM4.00 (R1)/RM4.50 (R2), while supports are noted at RM3.60 (S1)/RM3.20 (S2).

EKOVEST (Not Rated). EKOVEST rallied 9.0 sen (5.2%) yesterday to close at RM1.81 after the company announced its full-year FY16 earnings, which jumped 745%. Yesterday’s breakout confirmed a classic “Cup & Handle” pattern on the daily chart, and this signals continuation of its prior uptrend stretching back to April. The rising MACD trend and good trading volume are also constructive of the bullish chart pattern. By projecting the depth of the cup upwards, we expect the share price to climb to RM1.91 (R1) before reaching an eventual target of RM2.00 (R2), which coincides with the 138.2% Fibonacci Projection target level. Downside support is identified at RM1.72/1.75 (S1), with a lower support pegged at RM1.61 (S2).

Source: Kenanga Research - 2 Sep 2016